17 Jun 2022
Shanghai’s economy contracted in May for the second consecutive month according to local statistics bureau data published on Friday, impacting the city’s recovery outlook following a Covid lockdown in place for two months.
Industrial output in Shanghai declined 27.6% in May compared to the year before, but was less severe than April’s drop of 61.5%, Reuters reports.
A total of 96.3% of industrial businesses have resumed operations, with production above 70%, Vice Minister Xin Guobin told reporters. In the southern province of industrial hub Guangdong, production has basically returned to normal, Xin added.
Due to the strict lockdown, retail sales in Shanghai fell 36.5%, yet this was an improvement on April’s decline of 48.3%.
Despite a number of restrictions easing at the end of last month, and full-city lockdowns ending on 1st June, mass testing is still in place in all districts until the end of July. According to local government statistics, two new local symptomatic Covid cases were reported on Thursday, compared to nine on Wednesday.
In addition, fixed asset investment in Shanghai fell 21.2% in the first five months of this year, compared to the same time in 2021, compared to an 11.3% decline between January and April, the Reuters report adds.
Furthermore, there was a 23.0% fall in property sales in the first five months of the year, higher than the 17.0 drop between January and April.
In an attempt to boost Shanghai’s economy, officials announced 50 measures to help businesses and encourage rising consumption. This includes increasing the issuance and use of local government bonds and requesting banks renew loans for small businesses.